Fiji’s electricity tariff rates further burdens the consumers: says the Council

02/06/2010 12:28

The Consumer Council of Fiji is worried that the recent increase in the electricity price would put additional financial strain on consumers. Majority of these consumers are digging deep into their savings to pay for the numerous increases in the prices of food and services over the past few months.

Some of these are increase in the price of basic food items such as local butter and other dairy products, local frozen chicken, gas, fuel, telecom charges for post pay residential customers, and now the power bill. Whilst these increases are taking places there are no increases in their wages and salaries to cushion the effect of rising costs. How are consumers expected to cope with these increases with a stagnant pay packet?

Fiji does not even have a safety net to supplement those on pension, unemployed and those living below the poverty level. As announced yesterday, 17,343 households will benefit from the new FEA determination. If we take 4-5 members per household, it equates to about 87,000 consumers benefiting from the determination.

The Council is concerned that many households on the border of poverty or still below the poverty line are affected due to the shift in domestic life-line tariff from 250kwh to 130kwh. This group is a vulnerable group that is caught in the net to pay exorbitant sum of 34.82 cents. Surely this group is not high end users. We can expect increase in inflation and more people getting trapped into the debt cycle by resorting to moneylenders to make their ends meet.

The Council wishes to ask the Fiji Electricity Authority; how accurate is its cost of $US 150 million to built the Nadarivatu Dam? Will it really cost FEA $US 150 million to built the Nadarivatu Dam or is this an inflated figure based on some unfounded projection? How can consumers have faith in the decisions made by senior managers and board members of public enterprises when past experiences show that their judgements in financial matters have failed miserably costing taxpayers and consumers millions of dollars?

Good examples are the recent Fiji National Provident Fund case where more than $300 million was spent to construct the resort but the actual value of the resort is way less. Similarly, BP Southwest Pacific Limited has been sold for $145million (US$70m) to Pacific Petroleum Company (PPC), at least $45m less than what Fijian Holdings Limited wanted to buy the oil company for. We cannot allow companies to continue making unfounded financial decisions and expect the consumers and the taxpayers to pick-up the bill?

We also believe that FEA should increase its power conservation awareness with commercial and industrial users as their consumption is much higher than domestic users. Currently, the focus is mainly on domestic users as evidenced by FEA’s TV advertisements, community awareness programmes and other promotional materials.

While the increase may be justified based on the current circumstances, the consumers would like to know what are the administrative costs of running FEA? How is FEA tackling inefficiencies to curb its costs? We have noted increase in staff numbers from 569 at the beginning of 2008 to 649 at the end of 2008. Has the company looked at its inefficiencies? Or can it say or demonstrate that it is a lean and mean organisation?